Dominate the Rent Market With These 5 Tips From Industry Experts
“Federal Reserve officials have outlined risks to the U.S. financial system, reports the Wall Street Journal. U.S. apartments are getting smaller, while rents are rising, according to MarketWatch.” National Real Estate Investor (November 29, 2018)
Zillow recently published their 2019 market forecast, and according to their analysis, property managers and landlords have a lot to smile about as we head into a new year. Thanks to rising interest rates and shrinking inventory, rent growth will pick up. Competition for affordable housing is expected to get even tighter, as people search for a home they can afford. While the summary sounds like a landlord’s dream-come-true, this is no time to get complacent. Dominating the rental market means planning for the best, and preparing for the worst. Here are five tips to help you think about changes your property might make to increase revenue without alienating renters who need budget-friendly housing.
- Break Through Conventional Boundaries
Conventional thinking says full-occupancy is your primary marketing goal. A better approach might be exploring ways to capture higher profit margins by reducing individual rent prices. In California, where housing is already scarce, multifamily operators are literally “carving up their properties” to make room for an influx of job seekers migrating to metropolitan areas by installing portable walls to section off more private living quarters within homes and apartments. Tenants are willing to pay more for smaller spaces, if the amenities – gym, reading room, blanketed WiFi, in-unit laundry – add value. Look for ways to break through self-imposed boundaries, lower housing costs for renters, and improve your amenity package. (Read this piece for more budget-friendly inspiration.)
- Monitor Market Trends
Jerry Martin, a real estate broker and president of Washington Realtors, fears another crash. But, he admits it’s hard to make accurate, long-term projections. Martin recently told CNBC, “Who knows what may happen government-wise, economy-wise or anything else,” he said. “I really wish I had a crystal ball.” Your best strategy is to set aside a couple of hours per week to check your internal data and the external market research to see which direction your area is moving and be prepared to step into correction mode immediately if a major shift develops.
- Think Technology That Fits Today and Tomorrow
Here’s a question. Does your technology work for you, or are your digital tools holding you back? Sue Ansel, president and CEO of Atlanta-based multifamily developer offers this wisdom: “Unfortunately, it is not possible to future-proof a community against fast-changing technology. The goal is to provide services and technology that allow employees and residents to improve the quality of their lives.”
Evaluate your organization’s technology, everything from the electronic sign at your entrance that automatically adjusts to ambient light conditions, to computing and mobile devices and property management software. If your technology doesn’t support your goals, upgrade.
- Be Prepared
Planning for growth means you are ready for whatever comes your way? Do you have contingency plans if the housing market suddenly crashes? Can you adapt quickly to changing tenant demands? How long would it take you to rebuild if a fire or tornado wiped out half of your units? Do you have enough insurance to cover lost rent and protect owners and company executives against lawsuits? Reacting to a crisis distracts you from your primary focus, keeping clients happy. As soon as possible, organize a brainstorming session to discuss all the possible catastrophes your organization might face in the coming year, and develop a plan to overcome.
- Rethink Hiring
Being smart about hiring in today’s economy means realizing that job seekers have the advantage. The late Steve Jobs, the former CEO of Apple, had some great advice for companies across all sectors based on what they did at Apple: “It doesn’t make sense to hire smart people and then tell them what to do; we hire smart people so they can tell us what to do.” Jobs also put a strong emphasis on hiring people who are a culture fit for their business. It’s critical that new hires fit the values and culture of your company, right up there with experience, talent, and education.
Taking these five tips into consideration will position multifamily property managers to rise above the competition by focusing on what matters most.
AppFolio, Inc. develops Property Management Software that helps businesses improve their workflow so they save time and make more money. Appfolio submits articles & blogs including topics of Resident Retention, Improved Owner Communication, Time Management, and more.